1.2, but i figured out how it works already.
Changing the bandit xml files to upgrade into anything other than bandits requires the Disciplinarian perk, it seems the "occupation = bandit" is what the game checks to see if you are upgrading units outside the bandit tree, I managed to make the bandits upgrade into mercs just fine, but it seem that making the mercs upgrade to T6 using the perk is not doable right now.